One month to go for the Consumer Duty

In view of the upcoming effective date of the new consumer duty, the Financial Conduct Authority (FCA) has published a press statement. In it the FCA notes that while many firms appear to be making significant efforts to meet the new consumer duty standards and requirements, some firms still have work to do before the final effective date. For such firms and those that are presumably done with their preparation work, it is important to ask themselves the right questions to ensure that they are on track and utilize the remaining as time effectively as possible. These questions include the following – as quoted:
– Are you satisfied your products and services are well designed to meet the needs of consumers in the target market, and perform as expected? What testing has been conducted?
– Do your products or services have features that could risk harm for groups of customers with characteristics of vulnerability? If so, what changes to the design of your products and services are you making?
– What action have you taken as a result of your fair value assessments, and how are you ensuring this action is effective in improving consumer outcomes?
– What data, MI and other intelligence are you using to monitor the fair value of your products and services on an ongoing basis?
– How are you testing the effectiveness of your communications? How are you acting on these results?
– How do you adapt your communications to meet the needs of customers with characteristics of vulnerability, and how do you know these adaptions are effective?
– What assessment have you made about whether your customer support is meeting the needs of customers with characteristics of vulnerability? What data, MI and customer feedback is being used to support this assessment?
– How have you satisfied yourself that the quality and availability of any post-sale support you have is as good as your pre-sale support?
– Do individuals throughout your firm – including those in control and support functions – understand their role and responsibility in delivering the Duty?
– Have you identified the key risks to your ability to deliver good outcomes to customers and put appropriate mitigants in place?
Additionally, the FCA notes that by now, ALL Boards or similar management bodies should have a clear plan and oversight of the implementation progress and should have identified any shortcomings and plans to mitigate such by July 31, 2023.
Finally, the FCA refers to its Final non-Handbook Guidance for firms on the Consumer Duty (FG22/5) and to its consumer duty website which provide valuable assistance, information, and documents as to the preparation to the upcoming duty.